Risk management and tourism operators

Value chains have now become internationalised and global. According to estimates, 40% – 60% of all finished and commonly used products come from foreign markets. These are the effects of globalisation, which is in turn the result of political and economic choices. The tourism industry is something different because of its intrinsically international and global dimension.

Tourism sector operators, which produce a significant part of the gross domestic product in developed countries, are global and borderless actors by nature. And this matter is worth thinking about, because overseas presence is certainly a key aspect of entrepreneurial activity, but also exposes suppliers, employees and above all customers to risks which are sometimes significant.

Risks are particularly substantial where the local social, geopolitical or economic environment can pose threats not only to supply chain operators, but also to those who purchase holiday packages, often “blindly” and without full awareness of the risks posed by a pleasure trip. It is crucial for tourism operators to know how to measure, prevent and mitigate the risks posed by their activity in order to protect themselves from legal and economic liability.

The Italian legislation

The Italian legislation is clear, but courts have also unequivocally defined the boundaries of liability – criminal liability too – in relation to cases of nonconformity that are too often found in the sector.Leaving aside constitutional rules (articles 32 and 41 on the protection of health and safety), the main sources are Legislative Decree 81/2008 and Legislative Decree 231/2001. The former requires that the employer take security risk training, information and mitigation measures. The latter introduces the principle of administrative liability of legal entities. These are prescriptions designed primarily for employees but, as mentioned, court rulings have extended the range of protection to consumers. And the tourism sector is certainly not free from this obligation, which is also provided for by the Code of Tourism. The Code provides for strict liability of tour operators, that have to answer for any damage suffered by the client regardless of any subjectivity. Those who purchase tour operator services are considered as real “special consumers”, that, as such, deserve enhanced legal protection.

The impact of court rulings

Courts have identified a warranty obligation relating to foreseeable dangerous situations, based on which tourism companies legally bear the risk for any damage potentially suffered by the traveller. This is crucial, as such damage may expose the company to strict liability, as the company will have to answer for the damage in court even in the absence of fault or criminal intent.

A case study (although not relating to Italy) is the dispute between the tour operator TUI and the families of the British nationals who died in the 2015 terrorist attack in Sousse (Tunisia). In this case, the security risk assessment and mitigation measures taken by TUI were judged to be inadequate.

Guidelines for tourism operators

As we are talking about “tourism supply chain” and about an internationalised sector, it goes without saying that there are many players involved: tourism companies almost always rely on partnerships with local operators and professionals. Do not think that it is enough to prove partners’ compliance with local legislation to avoid legal consequences! The operator has to guarantee the same level of protection as provided for by Italian law, even overseas. For example, by making sure that partners and accommodation facilities provide security standards that are in line with the company’s requirements. This obviously requires that a constant and periodic screening and due diligence process be undertaken to continuously check the reliability of partners (Ed. see the article on pages 40-41-42 in S News no. 39 or on www.snewsonline.com).

Moreover, just as partners must be scrupulously monitored, local environments must also be continuously studied because social and geopolitical stability, which greatly affects security, is steadily evolving. Logistical issues (movements, travel, accommodation facilities) must be carefully evaluated by means of reliable methodologies.

Tourism operators must be aware that, under our criminal code (Article 40), not doing everything possible to prevent an event is tantamount to causing it. Businesses in the industry must therefore do everything that is allowed by current technology to be able to predict and monitor risks.

The Italian travel security market

The market offers different solutions, not all of them up to the challenge. Monitoring the geopolitical situation and knowing how to measure security risks in all corners of the world is not easy and requires high-level expertise, proven methodologies and applications, even better if resulting from cooperation between private organisations and academic environments. In this field there is no room for “do-it-yourself” solutions: consequences are potentially devastating.

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Specialising in operational, non-compliance and reputational risk management, IFI Advisory supports companies in developing their business in potentially critical environments and provides customers with decision-making support in a complex and interconnected global environment.